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Phones 4U goes into administration as EE opts out from the company

You may remember that a couple of weeks ago Vodafone pulled out of all Phone 4 U stores, disallowing the company from selling any of their contracts or phones, well now things have got worse, with EE announcing that it would not renew its contract after September 2015, revealing the following in a statement:

“In line with our strategy to focus on growth in our direct channels and to move to fewer, deeper relationships in the indirect channel, and driven by developments in the marketplace that have called into question the long term viability of the Phones 4u business, we can confirm that we have taken the decision not to extend our contract beyond September 2015. We will monitor developments and work to provide any necessary support for customers who joined EE through Phones 4u.”

Since that news broke, it seems that the mobile phone retailer decided to pack it all in, as it was announced on Sunday morning that Phones 4 U had gone into administration, with the Chief Executive of Phones 4U stating: “Today is a very sad day for our customers and our staff. If the mobile network operators decline to supply us, we do not have a business. A good company making profits of over £100 million, employing thousands of decent people has been forced into administration,”

This means that 720 of the companies outlets will not open in the immediate future, in fact there opening times will now rely on the decision by the administrators, who will decide if the business can be reopened for trading.

On top of its opening, around 6,000 jobs will be affected in total, and things have already begun, as currently the retailers site is down showing the following message to its customers:

In response to this, Vodafone posted the following statement:

“We are saddened to read that Phones4U have gone into administration and the impact that will have on their employees. However, we strongly reject any suggestion that we behaved inappropriately at any stage during our negotiations with Phones4U. The outcome was the result of a transparent negotiation over many months. Phones4U was offered repeated opportunities to propose competitive distribution terms to enable us to conclude a new agreement, but was unable to do so on terms which were commercially viable for Vodafone in the current UK market conditions.”

“We were told by the Phones4U management team that they had little commercial flexibility due to their debt repayment obligations, but that they had a number of alternative strategies in place if we couldn’t reach an agreement with them. So when we terminated our contract earlier this month, we made it clear that we would honour our existing contract, which runs until February 2015, to give them sufficient time to finalise one of those alternative strategies. It is now clear based on the events that have transpired that there were no viable alternative plans in place.”

Phones 4U did also reveal that anyone who has pre-ordered the iPhone 6 from them and not has it dispatched yet will get a refund and their order cancelled, confirming the details in the following statement:

“Any orders that have not already been dispatched will be cancelled and any payments refunded to customers. Phones 4u apologise for any inconvenience.”

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